U.S. jobless claims fall to four-month low of 1.31 million

The number of initial jobless claims fell by almost 100,000 in early July to a four-month low 1.31 million, but the pace of layoffs is still quite high and appears to be bogging down an economy recovery from coronavirus pandemic.

Initial jobless claims, a rough gauge of layoffs, dropped to 1.31 million in the seven days ended July 4 from a revised 1.41 million in the prior week, the Labor Department said Thursday. The figures are seasonally adjusted.

Economists polled by MarketWatch had forecast 1.40 million new claims. These figures reflect applications filed the normal way through state unemployment offices.

An additional 1.04 million people applied for benefits last week through a temporary federal-relief program, pushing the combined total for the week to 2.35 million.

The number of people receiving traditional jobless benefits through the states, meanwhile, declined to 18 million in the week ended June 27 from 18.8 million. These are known as continuing claims.

Yet if all eight state and federal assistance programs are included, continuing claims rose to an unadjusted 32.9 million in the seven days ended June 20, the most recent data available. That marks a small increase from 31.5 million in the prior week.

New jobless claims were the highest in the states of California, Texas, New York, Florida and Georgia.

California and New York are among a group of states that have been hit hardest by the coronavirus and that have struggled to process a deluge of new jobless claims. New reports from California suggest that up to 2 million claims are still outstanding.

More than 50 million new claims have been filed since mid-March. Before the crisis the states processed fewer than 225,000 claims a week.

The decline in the latest week may have been bigger than expected because of July 4. State employment offices were closed last Friday and some people wait until after the holiday to file claims.